All Forum Posts by: Douglas Gratz

To start , I currently buy in Norristown PA . I chose this area due to high CoC returns relative to purchase price . Usually I try to buy duplex’s and up and so far have acquired two singles and one duplex. Each cost me under 90k after rehab costs. So I try to spend less than 100k per property. My rents and cash flow are as follows: 1. Duplex 87k, 1bed/1bath $950 rent, 3bed/1batb $1250 rent. After all expenses my cash flow is 600/month 2. Single 90k 2500sqft 5bed/1batb $1450 rent with $300 cash flow 3. Single 85k 1700 sqft 3bed/1batb $1350 rent with 200-300cashflow

Hello friends! I’d like to start a discussion on where people are buying, how much they are spending , and what are their CoC returns? I don’t see many topics that discuss this so I figured I would start it. I was hoping to see what other investors are doing and compare it to my market it PA. Maybe help people see what markets may be good to invest in. So everyone, would you mind sharing some of your investments. Where are you currently buying, why are you buying there, and what returns are you seeing? Can’t wait to hear back, thanks!

@Joe Villeneuve I am a little lost on your last comment. I did pay all cash upfront. So I bought them at auction and then rehabbed them. To use the duplex I spent 87k to do all that, after refi, the bank gave me 77k . After paying all expenses each month I can pockets 600/month . So my CoC is 72% . You said above I am analizing this wrong, do you still stand by that or were you confused with my explanation ?

What did you mean when you said “When you are looking for cash flow, the total cost of the property (buy, interest, rehab, etc...) isn't equal to the total cost to you.”

@Chris Royle finally someone from my area. How are you? How long have you been into rentals if I may ask? And do you think the properties I mentioned above are doing good. All bought and rehabbed for under 90k and cashfkow about 300 on my singles and 600 on my duplex?

Also, I got those at auction and am afraid I got really good deals on them. As I search for more, I feel that buying duplex’s and up, that I am not going to get them for that cheap often. What do you think is a good price to pay for duplex’s 1800sqfr-2300sqft? Better yet what do you think I could sell a 1700sqft 3bed and 1 bed duplex for? What do you think the market value is? 

I’d appreciate any insight, as these were my first few properties and I am not sure if I got good prices on them? 

Last thing, where else around Norristown do you invest and  find good to buy to receive decent cash flow with a positive outlook/appreciation in the future ?

@Caleb Heimsoth my cash on cash returns are pretty high.

On my duplex , I just refinanced I am making a 72% CoC. I spent 87k on purchase and rehab and got 77k in my refi. With a cash flow of $600/month I come up with $7,200/10,000 = 72%

On my singles I am around 20%. So I assume those numbers are pretty good? 

@Nick Brown I mean my properties are cash flowing, but I guess what I mean by the right direction , I am more so thinking of the future.

I am buying in areas I know will most likely not appreciate well. It’s kind of a lower class area, but it’s an interesting bad area as taxes are very large, $3,000 a year compared to $1000 or less in the lower class neighborhoods in Philaphia. So norristown is a bad area with an alright school district.

So in regards to the future, I say I am not sure if I am heading in the right direction , because I am thinking of my ability to re-sell these properties when it’s time to trade up, if this type of neighborhoods rents will hold In bad times, etc etc 

My cash flow is high because of this risk I guess and I pretty much am answering my own question here.

Thank you 

@Nathan Gesner thank you for that response, I never concidered the “how do I define success” according to my goals and such.

@Joe Villeneuve I am including the purchase price +  the cost to fix it up 

Hello friends, Hope everyone has a good thanksgiving! So, I started in real estate investing about 3 years ago. I currently have 4 units , two singles and a duplex. All properties are in Norristown PA 1) My duplex cash flows approx $600/month and cost me all in $87k 2) Singles about $300/month. and each cost me all in a total of $90k each That being said, I am having difficulty measuring if I am on the right track to doing well. I look at properties in somewhat below decent neighborhoods in Philadelphia that cost above $150k . Rent is lower there because taxes are lower significantly and after some analysis cash flow on these 150k-250k duplex’s and triplexes are between 400-700. So in Norristown I am paying significantly less for about the same cash flow . What I do not understand is how people make money on these houses I speak about above. I wonder because I would like to buy in these Philadelphia neighborhoods because they have a better chance of appreciation and resale down the line. But if I finance a 200k house my monthly payment would be around $1000/month, about $1300 after taxes and insurance. So if I have a duplex in Philly and get on the higher end of rents $900 per unit I could cash flow 300-500 depending on expenses. So I guess my question are: 1) Am I making the right move when investing in Norristown where can buy two duplex’s for the price of one in Philadelphia? 2) I know this is hard to answer, but how would I begin figuring out if I am making good investments in my market? Any advice would be greatly appreciated, thank you for your time !

@Marcia Maynard

Thanks, yeah I just want them out because they pay 650/month where as I can get 900.

So if they are on month to month lease, I can raise the rent. If they do not agree I can get them to vacate correct?